Escrow & Title
In NC, a 'lis pendens' filed against a property means:
AThe property has been sold at foreclosure
BA lawsuit involving the property's title is pending, putting prospective buyers on notice✓ Correct
CThe property has passed all title examinations
DThe property is exempt from property taxes
Explanation
A lis pendens ('suit pending') is a recorded notice that litigation affecting the title to or possession of real property is pending. It warns prospective buyers and lenders that the property's title may be affected by the outcome of the lawsuit.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
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